Chinese denial puts Nigeria telcom sale in doubt

By IBT Staff Reporter On 02/18/10 AT 8:39 AM

HONG KONG/ABUJA - China's No. 2 telecoms carrier China Unicom on Thursday denied any involvement in a $2.5 billion bid for Nigeria's former state telecoms monopoly, putting in doubt what would be the African country's biggest privatization.

The Nigerian government body overseeing the long-troubled privatization of Nitel announced on Tuesday that a consortium involving China Unicom was the preferred bidder with a bid far higher than any of others or than many had expected.

There's no involvement of this project from the parent company, the listed company or any subsidiary of the company, Unicom spokeswoman Sophia Tso said in an emailed statement.

The National Council on Privatization said New Generation Telecommunications Ltd had become the preferred bidder for Nitel, which Nigeria has struggled to sell since liberalization in 2001 made it uncompetitive against rivals.

The government made no immediate comment on Unicom's statement.

If this is true, it discredits the Nigerian authorities and the privatization processes itself, said analyst Thecla Mbongue of Informa telecoms and media group.

It's not the first time they have tried to sell Nitel, which obviously doesn't send a good signal to investors.

GROWING MARKET

Besides Unicom, the National Council on Privatization said the consortium included Minerva Group of Dubai and local company GiCell Wireless Ltd. No details on various members' holdings in the consortium were given.

An official at GiCell Wireless in Abuja said the company was involved in the bid for Nitel, but gave no further details.

There was no comment from Nigeria's privatization agency, the Bureau of Public Enterprises.

Nigeria has overtaken South Africa to become the biggest telecoms market in Africa with more than 62 million subscribers and is one of the fastest growing in the world, making it a potentially attractive country for foreign players.

But early reports of Unicom's participation in the Nitel bid had surprised many, as the company has little experience in overseas mergers and acquisitions. Unicom's state-run parent owns about 20 percent of PCCW, Hong Kong's former telephone monopoly, but has made few if any forays outside Greater China.

Chinese telecoms carriers in general have been receptive to selling strategic stakes to other major global carriers, but have largely focused operations on their own lucrative home market, the world's largest with about 750 million subscribers.

The reserve bidder in the Nitel sale was Omen International Ltd (BVI) with a bid of $956 million. (Reporting by Doug Young in Hong Kong, Nick Tattersall and Matthew Tostevin in Abuja; Editing by Hans Peters)